Managing Risk Through Corporate Compliance
A recent survey by AlixPartners found that corporations are directing their attention to finding ways to proactively manage potential risks. In the face of rising litigation and regulatory enforcement actions, corporate compliance and legal departments throughout the country reported that their efforts are going towards implementing education and training programs to reduce litigation risk.
AlixPartners’ 2014 Litigation and Corporate Compliance Survey polled general counsel and compliance officers from more than twenty major industries including insurance, financial services, health care, information technology, and energy. The survey found that 71% percent have already implemented risk management education and training programs, and 56% reviewed existing compliance programs to identify gaps.
The survey illustrates that corporate priorities include risk management, in fact 45% of respondents said that proactive risk management was the most critical issue for their legal departments during the past 12 months. The next most-critical issue for them was controlling costs.
Nearly half of all the survey respondents stated that proactive risk management will add the most value to their companies during the next 18 to 24 months. The next value-adding action is ensuring their companies are complying with regulations.
The survey tried to get an idea of whether companies are facing increased litigation. A large number of survey respondents suggested they are, in fact, facing increased litigation. For example:
- 32% said their companies faced an upsurge in legal disputes
- 56% said the volume of legal disputes they faced stayed the same
- 12% said they experienced a decline in the number of their legal disputes
Respondents were requested to categorize the legal disputes they met during the last year. The top disputes identified involved contracts, employment, intellectual property or patent infringement, accounting/ financial reporting/disclosure, and insurance.
These results show that companies are placing a lot of emphasis and resources into avoiding and mitigating risks. The compliance function is increasingly important not just because of increased regulations, but also because of the growing cost associated with litigation. Also, in many cases, should a company be brought into court, if they can show they have implemented a compliance plan, they could mitigate their possible damages. If your company has questions or concerns about implementing a compliance plan, consult an experienced business law attorney.
Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.